Ontario Auto Regional Meetings

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Why are these changes happening?
Overview of the coverages
Overview of process changes
Consumer Communication
E&O best practices
To help stabilize rates, the Ontario
government implemented changes to auto
insurance.
• Reducing Fraud
• Reduce Rates
• Most changes become effective June 1, 2016
• Include lower standard limits
• Include new Accident Benefits(AB) buy-up
options
• Include new Statutory Accident Benefit
Schedule (SABS) – procedures for payment to
change
There are THREE major changes:
1. A reduction in the med rehab / attendant care
benefit limits and the duration benefits are
available;
2. A major reduction in the scope of non-earner
benefits; and
3. A reduction in the catastrophic impairment
benefit limits.
IBAO supports the continued
effort of the government to
implement reform. These actions
fight fraud and responsibly
lower rates for consumers.
Effective June
1st Renewals
• Auto insurance is a complex product. Only an
insurance broker can properly explain
important coverage details and encourage
clients to see the bigger picture beyond price.
Customize insurance for your clients
There are three categories: minor, serious and catastrophic. Categories
determine the level of benefits the injured party receives.
MINOR INJURY
• Examples: sprains, whiplash. When injuries are deemed minor, medical
and rehabilitation benefits are limited to $3,500 regardless of the level of
coverage.
NON CATASTROPHIC/SERIOUS INJURY
• Examples: broken bones. Serious injuries typically disrupt quality of life for
a prolonged period of time.
CATASTROPHIC INJURY
• Examples: loss of limb, paraplegia, brain injury. Catastrophic injuries result
in increased benefits.
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Unaware they are available
Consumers are price-sensitive
Misunderstanding of what coverages provide
No real dialogue with their broker
• Medical + Rehabilitation: Reimbursement for reasonable,
necessary medical and rehabilitation expenses such as
physiotherapy not covered by OHIP or Group Insurance
Plans.
• Attendant Care: Reimbursement for an attendant to look
after you either at home or within a healthcare facility.
COVERAGE IS VARIABLE BASED ON INJURY TYPE
Non-catastrophic impairment claims base coverage has been
reduced by approximately 25%
Duration for access
Shortened from 10 years
to 5 years
Catastrophic impairment claims base coverage has been
reduced by approximately 50%
Revised Definition of a CAT injury
has been narrowed
• New benefit ($1 million Medical, Rehabilitation and
Attendant Care for catastrophic injuries)
• Brokers must receive special instructions before
adding
• Claimants meeting the Minor Injury
definition will only be eligible for $3,500
• Claimant’s doctor can present
“compelling evidence” if higher limits are
needed
Are you aware that OHIP won’t cover all of
your expenses, such as:
• physiotherapy;
• mobility devices, such as crutches or
wheelchairs;
• doctor’s fees for completing paperwork related
to an injury;
• medical assessments;
• prescription drugs?
Continued…
Does your employer provide a Group Insurance Plan?
• Know what you are covered for. Most employer
benefit packages are limited to $500 a year per
practitioner.
• Reimbursement to hire someone
to care for your dependants if you
are a primary giver.
• Do you have children or elderly parents that are
dependent on you for care?
• Who would care for them if you were injured in a car
accident?
• Are you a single parent?
• How will you make sure that your expenses are not
drained to subsidize care for these individuals in the case
of an unexpected car accident?
• Reimbursement for someone to
carry out your household
responsibilities.
• Do you live in a house or a condo?
• Who normally does the housekeeping in your
household?
• Are there people in your life who could help you care
for your home if you were injured in an accident?
• If you had to hire someone to help you care for your
home, how would you subsidize the expense?
Is your income close to
or greater than:
You should consider an
income replacement
benefit at this level
$30,000/year?
$600 per week
$45,000/year?
$800 per week
$60,000/year?
$1,000 per week
• If you are off work for a period of time, will the base
coverage on your car insurance policy be an effective
supplement to your current income to pay for monthly
expenses?
• Do you earn over $30,000/year? $45,000? $60,000?
Claims made on or after June 1, 2016, eligibility for
non-earner benefits now:
Maximum duration of 2 years
• Reimbursement for additional
expenses to care for your dependants
if you’re employed and injured from a
car accident.
• Do you have children or elderly parents that are
dependant on you for care?
• If you were working with an injury (example, broken
leg), would you need extra support to care for your
dependants?
• Who would care for them if you were injured in a car
accident?
• Are you a single parent?
• A lump sum payout to your spouse
and dependant(s);
• a second lump sum payout to
cover the cost of funeral
expenses.
• Do you have life insurance or prepaid “final
expenses” arrangements?
• Do you know how much your other
coverage would pay?
• Adjustment of benefits to
account for changes in inflation.
• The amount deducted from a
settlement or court award for
pain and suffering
Consumers Have Choice
Purchasing quality coverage is
an investment in them.
Help them make the right
decisions from the start.
Effective June 1st for all…
Current SABS Claims Procedures
May Claim
New SABS Claims Procedures
July Claim
Current SABS Limits until next renewal*
Current SABS Limits
New SABS Limits
June 1
• $500 Comprehensive Deductible
• Reductions in the maximum interest rates
for monthly payment plans
• Winter tire discounts required to be offered
by all insurers for policies effective on or
after January 1, 2016
An insurer may no longer take into consideration a minor accident that occurs
on or after June 1st, 2016 in deciding whether to issue, renew or cancel a policy
or in determining the premium, if all of the following criteria are met:
• Cost of damage to each vehicle involved in the accident, including PD does
not exceed $2,000, and the cost of all damages is paid by the at-fault party
• No personal injuries are sustained
• No payment is made by any insurer for any damage to the vehicles or
property resulting from the accident
• Exception: An insurer may consider a minor accident that occurs on
or after June 1, 2016 if the vehicle was involved in a total of more than
one minor accident in the previous three years, and in each accident
the driver of that vehicle was at fault.
All options available must be
presented to the consumer to
make an informed decision.
• The government has created 2
consumer communications to
educate consumers of the
changes in 2016.
1. Early Awareness Mailer
2. Point of Sale Document
• FIRST COMMUNICATION HAS BEEN SENT
• Mailed by the insurer to all automobile policy
holders on March 1, 2016
• Cannot be modified by the broker or the insurer
SECOND COMMUNICATION
• Will be mailed by the insurer to all
automobile policyholders with all renewals
issued effective June 1st, and later
• Cannot be modified by the broker or the
insurer
Consistent
Messaging
• Each
consumer will see
the same
messaging and language with the
insurer communications
• Intended to urge consumers to wait
until their renewal to make any
changes
• Brokers should communicate above
and beyond the standard
government communications
Consistent Messaging
– Send a letter to your clients
– Include a copy of the brochure
– Upload a copy of the brochure to your
website
• Digital version available for you
• Upload our videos to your website
• Use the IBAO blogs to draft letters or share
content with your clients
– Use our social media content on your
social media channels
1. A broker branded brochure
2. Consumer-facing videos for your website,
social media, or to play in your office
3. Blog posts, available for sharing, answering
common consumer questions
4. Active consumer social media campaign
positioning brokers as best option
• Checklist
• Tent Card
• Key Questions to Ask
• Med/Rehab Cost Examples
http://www.ibao.org/ontario-auto
• If no optional benefits have been “bought up”
in the past, the renewal will transition into the
new standard policy.
• Optional accident benefits cannot be applied
automatically on new or renewal business
without a policyholder’s instructions.
• Any options already exercised by the
consumer will continue through the renewal,
i.e. a consumer has purchased increased
income replacement benefit with a limit of
$800.
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If no options have been purchased
under the AB section, the renewal will
contain only the new Standard Policy
AB limits.
• The renewal will be issued with the
same optional accident benefits
or coverages on his or her policy.
Policyholders who purchased the increased optional
$100,000 medical and rehabilitation benefit and/or
$72,000 attendant care benefit.
• Insurers and brokers must use best efforts to contact
these policyholders and receive specific instructions on
whether to replace
Brokers must substitute these
optional benefits on renewal
with the next higher optional
benefit
• Example: if a policyholder substitutes a vehicle, or
wishes to change coverages (e.g., increase collision
deductible)
• The coverages would continue at the same levels as
previously written, unless the policyholder
requests otherwise.
• Cancel the policy and re-issue, or
• Use the revised OPCF 25A to modify the
terms of their policy.
• the coverages would continue at the same
levels as previously written unless the
policyholder requests otherwise, and
would be the same for all vehicles written
on the policy.
• The broker must act in the best interest
of the policyholder.
• There must be full disclosure to the
policyholder about the impact of the
move on coverages and new applicable
rates.
• All inbound calls should include
scripted description of new AB
reduction and available options
• Detailed activities to record
discussion
• Individualized records required –
no “cut and paste” recording of
conversation
Don’t fall victim to the “My
Broker Never Told Me”
accusation from customers
• Good Record Keeping
• Documented Communication
Processes
• Convey Information
• Counsel ALL Consumers
• Be a Trusted Advisor
• Understand Your Product